The Shift towards Direct-to-Consumer Advertising Trend

Advertising shift

As someone who’s has been on multiple sides of the advertising world, I’ve seen an interesting shift in how brands advertise today as a direct result of social media.  For the first time for many brands, they can now engage directly with their customers.  And that’s new and different, so they are just learning.  But first, for our non-media friends, a basic overview of the pre-social media (preSM) advertising world.

Brand advertising.  Very basically, up until a few years ago, brand advertisers focused on communicating who they are and what they represent to the general masses.  Chanel fragrance.  Burberry fashions.  When I read those words, an image of them immediately pops into my mind.  Brands advertise across various mediums they believe their customers engage with and project their image to everyone in those mediums:  magazines, TV, some billboards.  The belief is that people who want to be associated with that brand will purchase that brand.

Direct response.  A speciality within advertising or marketing whose primary focus is to elicit some sort of response or action from an individual such as agreeing to receive further information (lead) or purchase a product directly (buyer).  The primary difference is that the brand speaks directly to the potential buyer and carefully select known buyers (of similar products) to communicate to because they have a higher propensity to purchase additional products.  And once someone purchases their product directly, direct response can establish a revenue-to-expense ratio – an ROI, versus an ad that has no quantifiable ROI.  Direct response uses more targeted tactics like email, direct mail, catalogs, and more broadly, direct response television (DRTV – a mash up of the two types).

Even with the advances of the internet and better online ad creatives, brands have been slow to move advertising dollars online.  Yes, online advertising depends on an action from a person, but since the ad is displayed very broadly (not all that targeted), and brands don’t know much about those clickers, the ROI has been pretty low.  But unlimited inventory and cheap prices mean that it doesn’t cost much so as consumers start interacting with online ads, the ROI becomes more attractive.  Finally, after a decade of online advertising, 2012 is predicted to be the year that online advertising dollars will exceed traditional advertising dollars – that all important “tipping point.”

What’s different today?  Social networking happened, namely Facebook.  Before Facebook, there was MySpace which was a bit of the wild, wild west, so brands stayed away.  But it’s hard to stay away when suddenly, everyone and their mother is on Facebook.  These are the very people who watch TV, read magazines, and do the traditional sort of stuff that advertisers used to advertise through.  And guess what?  Brands can now interact directly with the very people they are trying to get to purchase their products.  The goal now is to directly influence these people to purchase their products.  So today, brands are trying to play catch up on all the analytics and understanding of purchase triggers – ideally, prior purchasing behaviors – that direct response has always had.

And in the meantime, direct response has responded by placing much higher values on creative and paying attention to their brand image, a detraction rightly deserved in the past.  Some catalogs today look more like magazines, and magazines today are leaning towards adding ecommerce revenue channels to their overall revenue channel mix.

Would you agree that brands are now trying to directly communicate with their consumers?  Are they doing a good job?

Next up is how brand advertisers can connect directly to their consumers today.

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